Sen. Kyrsten Sinema’s first piece of legislation to pass the Republican-controlled Senate aims to better protect veterans from predatory home loan practices.
The legislation, passed June 5 by unanimous consent in the Senate, aims to clarify the seasoning requirements for certain mortgage loans. Loans are considered seasoned after the borrower has made at least six consecutive monthly payments.
The Protecting Affordable Mortgages for Veterans Act fixes previous legislation that made it more difficult for rapid refinancing, a tactic known as “loan churning” in which veterans are convinced to refinance their home mortgages, and fees and other expenses are often added.
The previous legislation made about 3,000 VA-guaranteed loans ineligible for pooling under the Government National Mortgage Association, known as Ginnie Mae.
Sinema’s legislation, co-sponsored by Sen. Thom Tillis, R-North Carolina, would allow these so-called “orphaned” loans to be delivered to Ginnie Mae. If left alone, the loans could cost the lenders that originated them millions of dollars, said G-II Varrato II, the Arizona Director of the Veterans Association of Real Estate Professionals and a real estate agent who lobbied for the bill.
With fewer bills passing both chambers of Congress in the era of a divided government, the legislation for a technical change demonstrates the art of the possible.
Sinema, a Democrat who campaigned heavily in 2018 on a platform to help veterans on issues ranging from homeownership to healthcare, said the measure, if signed into law, will help veterans fulfill their dreams of buying a home.
Varrato II said the bill will provide certainty for the 3,000 or so homeowners whose loans have been in limbo.
“This bill makes an important change to existing law that helps protect veterans from unscrupulous lenders and keep more veterans in their homes,” he said.